The US Congress has approved a deal to lift the country’s borrowing limit, days before the world’s largest economy is due to default on its debt.
The bipartisan measure sped through the Senate by a vote of 63-36, a day after it cleared the US House of Representatives.
An Overview of the News
- The bipartisan measure passed through the Senate with a vote of 63-36 after the US House of Representatives approved it.
- President Joe Biden committed to turning the measure into law to protect the US from a catastrophic default on its $31.4 trillion debt.
United States House of Representatives
- It is the lower house of the United States Congress.
- It, along with the Senate, forms the national bicameral legislature of the United States.
- Its structure and functions are established by Article One of the United States Constitution.
- It provides proportional representation based on the population of each state.
- It has a total of 435 representatives.
- Avoiding default: The borrowing limit, also known as the debt ceiling, represents the maximum amount of money the US government can borrow to fund its operations and meet its financial obligations. Approving a deal to lift the borrowing limit would prevent the US from defaulting on its debt. Defaulting could have severe consequences, such as damaging the country’s creditworthiness, increasing borrowing costs, and causing disruptions in financial markets.
- Ensuring government operations: Lifting the borrowing limit would allow the government to continue funding its operations and programs. Without an increase in the borrowing limit, the government might face challenges in meeting its obligations, leading to potential disruptions in public services and government functions.
- Maintaining investor confidence: By approving a deal to lift the borrowing limit, the US Congress would demonstrate a commitment to meeting its financial obligations and addressing the country’s fiscal needs. This could help maintain investor confidence in US Treasury bonds and the overall stability of the US economy.
- Political implications: The process of approving a deal to raise the borrowing limit often involves political debates and negotiations. The outcome of these discussions can have political ramifications, influencing public perceptions of elected officials and their ability to manage the country’s finances effectively.
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US Congress approves deal to lift country’s borrowing limit